Full Judgment Text
REPORTABLE
IN THE SUPREME COURT OF INDIA
CIVIL APPELLATE JURISDICTION
CIVIL APPEAL NO. 8225 OF 2009
Chowgule & Company Limited …Appellant
Versus
Assistant Director General of Foreign Trade
& Others …Respondents
J U D G M E N T
M.R. SHAH, J.
1. Feeling aggrieved and dissatisfied with the impugned judgment
and order dated 26.06.2008 passed by the High Court of Judicature of
Bombay at Goa in Writ Petition No. 286/1996, by which the Division
Bench of the High Court has dismissed the said writ petition by holding
that the appellant shall not be entitled to the benefit of additional licence
on the export of processed iron ore during the period April, 1990 to
Signature Not Verified
Digitally signed by
NIRMALA NEGI
Date: 2022.11.04
16:23:53 IST
Reason:
March, 1991, the exporter has preferred the present appeal.
2. The facts leading to the present appeal in a nutshell are as under:
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That the appellant is engaged inter alia in the export of processed
iron ore and is a recognised trading house. Under the Indian Foreign
Trade Policy (hereinafter referred to as the ‘Exim Policy’) 1988-1991,
there was a provision of ‘additional licence’ and a trading house would
be eligible to ‘additional licence’ on the basis of the admissible exports in
the preceding licensing year. Para 212 of the Exim Policy, 1988-1991
provided that in considering the eligibility of an exporter for recognition
as a trading house based on Net Foreign Exchange (NFE) earnings from
export of items specified in Appendix 12 shall not qualify. At the relevant
time, Appendix 12 provided that export of “Minerals and ores –
unprocessed” would be ineligible for considering the grant of additional
licence. In the year 1990, there was a change in the Exim Policy and
the Director General, Foreign Trade came out with a new policy, namely,
Exim Policy, 1990-93. There was an amendment in Appendix 12 and the
list of ineligible items which earlier was “Minerals and ores –
unprocessed”, in the new Appendix 12, it was stated to be “Minerals and
ores”.
2.1 It is the case on behalf of the appellant that relying upon the
original Exim Policy, 1988-91 and acting upon the said policy, the
appellant entered into a contract with one NKK Corporation, Japan on
7.2.1990, for export of processed iron ore, which was not an ineligible
item in Appendix 12 under the Exim Policy, 1988-91. However, the
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appellant actually exported the processed iron ore and realized NFE
earnings of Rs.52,00,51,848/- for the year 1990-91. The export was
made between the period April, 1990 to March, 1991 during the new
Exim Policy, 1990-1993. The appellant applied to the Assistant Chief
Controller of Imports and Exports for grant of additional licence for value
of Rs.6,08,46,000/- against FOB value of export of processed iron ore
amounting to Rs.52,00,51,848/- for the year 1990-91.
2.2 Vide letter dated 23.7.1992, the application of the appellant for
grant of additional licence came to be rejected by the Assistant Chief
Controller of Imports and Exports on the ground that there was no
provision for grant of additional licence in the then current policy of 1992-
97. In an appeal preferred by the appellant, the Joint Director General of
Foreign Trade remanded the matter to the Assistant Chief Controller of
Imports and Exports for a fresh adjudication. Vide its order dated
30.04.1993, the Assistant Chief Controller of Imports and Exports again
rejected the said application by observing that the item “iron ore
processed” exported by the appellant during April, 1990 to March 1991 is
included in the Appendix 12 of the Exim Policy, 1990-93 and therefore
the same is not eligible for additional licence during the corresponding
licensing period, i.e., 1991-92.
2.3 The appellant preferred an appeal challenging the order dated
30.04.1993 before the Joint Director General of Foreign Trade, which
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was rejected on 2.9.1993. The appellant preferred a second appeal
before the Additional Director General of Foreign Trade. The Additional
Director General of Foreign Trade by order dated 05.10.1994 rejected
the second appeal for the reason that the application for additional
licence was time barred. In the writ petition filed by the appellant, by
order dated 13.09.1995, the High Court remitted the matter to the
Additional Director General of Foreign Trade to consider the question of
the appellant’s eligibility for additional licence or in lieu thereof the
appellant is entitled to 20% premium. After remand, the second
appellate authority again dismissed the appeal on the ground that the
application filed by the appellant for grant of additional licence was
barred by limitation.
2.4 Aggrieved by the decision of the second appellate authority, the
appellant filed a writ petition before the High Court being Writ Petition
No. 286/1996. The High Court, by judgment and order dated
30.01.2001, allowed the said writ petition and quashed and set aside the
order of the Additional Director General of Foreign Trade dated
12.01.1996 denying the benefit of additional licence and directed the
department to pay to the appellant the premium of Rs.1,21,69,200/-.
While directing so, the High Court observed and held that the appellant
was eligible for the benefit under the Exim Policy during the period 1991-
92 and therefore there was no justification nor any legal basis for
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denying the claim on the ground of withdrawal of Policy in 1992-93 by
public notice dated 29.02.1992. In sum and substance, the High Court
was of the view that the subsequent change in the policy and/or
withdrawal of the policy in the year 1992-93 shall not be applicable and
the appellant shall not be denied the benefit of additional licence on the
aforesaid ground. The judgment and order passed by the High Court in
Writ Petition No. 286/1996 was the subject matter of appeal before this
Court being Civil Appeal No. 5764 of 2001.
2.5 By judgment and order dated 04.04.2007, this Court set aside the
order passed by the High Court and remitted the matter to the High
Court by observing that the point as to whether the appellant was
ineligible for grant of additional/special licence as per Appendix 12
attached to Import and Export Policy from April 1990 to March 1993 was
not examined either by the High Court or by the first appellate authority
and the high Court failed to consider the effect of Appendix 12 of the
Policy of April 1990-March 1993. On remand, the High Court, by the
impugned judgment and order, has dismissed the writ petition preferred
by the appellant by observing that under the amended/new Exim Policy
1992-1993, the exported item – “processed iron ore” was an item
specified in Appendix 12 and as per Appendix 12, the exported item
“processed iron ore” was ineligible for the purpose of grant of benefit of
additional licence.
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2.6 Feeling aggrieved and dissatisfied with the impugned judgment
and order passed by the High Court, the appellant – exported has
preferred the present appeal.
3. Shri Ravindra Shrivastava, learned Senior Advocate has appeared
on behalf of the appellant and Shri N. Venkataraman, learned Additional
Solicitor General of India has appeared on behalf of the respondents.
3.1 Shri Ravindra Shrivastava, learned counsel appearing on behalf of
the appellant has vehemently submitted that the issue essentially is with
regard to the appellant’s claim for grant of additional licence under the
Exim Policy 1998-91 based on eligible export of “processed iron ore” in
the preceding years.
3.2 It is submitted that the appellant acted upon the Exim Policy 1988-
91 and incurred commercial and financial commitments severely altering
its position to its serious detriment. The appellant exported the
“processed iron ore” in the year 1989-91.
3.3 It is submitted that as per the decision of this Court in the case of
Union of India & Others v. Chowgule & Co. Ltd. and Others, (2003) 2
SCC 641 , the appellant was entitled to grant of additional licence, vis-à-
vis, the export of “processed iron ore” made during the year 1989-90. It
is submitted that however when the appellant was engaged in making
export of “processed iron ore” in the subsequent year, there was a
change in the policy before the expiry of period of three years during
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which 1988-91 policy was solemnly declared to remain in force and the
same came to be substituted by Exim Policy 1990-93. It is submitted
that under the changed Exim Policy, in Appendix 12, “Minerals and Ores”
are now declared ineligible inter alia for the purpose of additional licence.
It is submitted that however as the appellant had already acted upon the
Exim Policy 1988-91 and on 7.2.1990, it entered into an agreement with
NKK Corporation, Japan and thereafter it exported “processed iron ore”
worth Rs. 52 crores of foreign exchange earnings during April, 1990 to
March, 1991, the appellant shall be entitled to the benefit of grant of
additional licence as claimed under the Exim Policy, 1988-91.
3.4 It is further submitted that applying the doctrine of promissory
estoppel , the appellant shall be entitled to the benefit of grant of
additional licence on the export of the “processed iron ore”. It is
submitted that while negotiating and agreeing for price with the importer,
it factored in the price component, the incentive of additional licence
which was in force at the time under the prevalent policy. It is submitted
that thus, all the elements for attracting principles of promissory estoppel
are present.
3.5 It is further submitted that in case of several others similarly
situated exporters, the benefit of additional licence was granted. That
the action of Director General of Foreign Trade denying the benefit of
additional licence to the appellant on the export of “processed iron ore”
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can be said to be discriminatory and violative of Article 14 of the
Constitution of India. Heavy reliance is placed upon the decisions of this
Court in the case of Motilal Padampat Sugar Mills Co. Ltd. v. State of
Uttar Pradesh, (1979) 2 SCC 409 (para 24); Union of India and
Others v. Indo-Afghan Agencies Limited, (1968) 2 SCR 366 = AIR
1968 SC 718; Union of India & Another v. V.V.F. Limited, (2020) 20
SCC 57; and State of Uttar Pradesh & Another v. Birla Corporation
Limited, (2020) 20 SCC 320 on promissory estoppel and on the
submission that no withdrawal is permissible unless it is justified.
4. Shri N. Venkataraman, learned ASG appearing on behalf of the
respondents, while supporting the impugned judgment and order passed
by the High Court and while supporting the orders passed by the
Director General, Foreign Trade, denying the benefit of additional licence
to the appellant, has vehemently submitted that the denial of the
additional licence is absolutely in consonance with the Exim Policy 1990-
93. It is submitted that admittedly the appellant exported the “processed
iron ore” during the Exim Policy 1990-93, which was binding upon the
appellant. It is submitted that the appellant actually exported the
“processed iron ore” post April, 1990. It is submitted that under the Exim
Policy 1990-93, as per Appendix 12, “processed iron ore” was in the
excluded category and in the category of ineligible items. It is submitted
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that as per the Exim Policy, the additional licences were available only
on export in the preceding years of eligible items.
4.1 Now so far as the submission on behalf of the appellant on
promissory estoppel is concerned, it is submitted that the benefit of
additional licence was in the form of an incentive and the same cannot
be claimed as a matter of right. It is submitted that being a policy
decision, it is always open to the Department/DGFT to come out with a
modified/fresh/new Exim Policy. It is submitted that therefore the
principle of promissory estoppel shall not be applicable at all, more
particularly when the incentive is withdrawn in the subsequent/new
policy. It is submitted that therefore as rightly observed by the High
Court, where the appellant is found to be ineligible to get the benefit of
additional licence on the export made during the new Exim Policy, 1990-
93, the appellant shall not be entitled to the benefit of additional licence.
4.2 Now so far as the submission on behalf of the appellant that some
other similarly situated exporters are granted the benefit of additional
licences is concerned, it is submitted that there cannot be any negative
discrimination pleaded and claimed. It is submitted that merely because
some benefits might have been given wrongly to some other
persons/exporters, the appellant cannot claim parity and pray for the
similar benefits. Once, it is held that the appellant is not entitled to
additional licence on export of “processed iron ore”, the appellant shall
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not be entitled to the benefit of additional licence as claimed, which
otherwise is not entitled to on merits.
4.3 Making the above submissions, it is prayed to dismissed the
present appeal.
5. We have heard learned counsel for the respective parties at
length.
At the outset, it is required to be noted that the appellant is
claiming the benefit of additional licence on the export of “processed iron
ore” exported during the Exim Policy 1990-93. It is an admitted position
that the “processed iron ore” had been exported during April, 1990 to
March, 1991. It is to be noted that under the Exim Policy 1990-93,
“Minerals and Iron Ore” are included in the list of ineligible items. As per
Exim Policy 1988-1991, only the export of “unprocessed iron ore” was
ineligible to get the benefit of additional licence. However, when the new
Exim Policy 1990-93 came into existence, as observed hereinabove, the
“Minerals and Iron Ore” are in the list of ineligible items – the appellant
had actually exported “processed iron ore” during the period April, 1990
to March, 1991, which was under the regime of new Exim Policy 1990-
93 and as observed hereinabove under the new Exim Policy 1990-93,
the export of “Minerals and Iron Ore” are included in the list of ineligible
items, the appellant has been denied the benefit of additional licence.
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At this stage, it is required to be noted that under the Exim Policy,
the benefit of additional licence which as such was in the form of an
incentive is available on actual export in the preceding year and the
benefit of such export for the purpose of additional licence to the FOB
value shall be available in the next year. Under the Exim Policy, the
benefit of additional licence shall be available only on actual export in
the previous year and that too to eligible items only. Under the
circumstances, when the appellant exported the “processed iron ore”,
i.e., during the period between April, 1990 to March, 1991, the “Minerals
and Iron Ore” as per Appendix 12 were in the list of ineligible items, the
appellant is rightly denied the benefit of additional licence. At this stage,
it is required to be noted that the appellant had never challenged the
new Exim Policy 1990-93. Therefore, in the absence of any challenge to
the new Exim Policy 1990-93 under which on export of “Minerals and
Iron Ore”, there shall not be the benefit of additional licence, the new
Exim Policy 1990-93 shall be applicable.
6. The appellant is claiming the benefit of additional licence under the
Exim Policy 1988-91 on the ground of promissory estoppel . However,
when the new Exim Policy 1990-93 is held to be applicable under which
on export of ‘Minerals and Iron Ore”, there shall not be any benefit of
additional licence, the appellant cannot be permitted to claim the benefit
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of additional licence under the old Exim Policy, which was not in
existence.
7. Now so far as the submission on behalf of the appellant on
doctrine of promissory estoppel is concerned, it is required to be noted
that the benefit of additional licence was in the form of an incentive. The
DEFT/Union is free to change the Exim Policy and consider from time to
time on which items there shall be an incentive and on which items there
shall not be any incentive. To grant the benefit of an incentive is a policy
decision which may be varied and/or even withdrawn. No exporter can
claim the incentive as a matter of right. Under the circumstances, the
doctrine of promissory estoppel shall not be applicable to such a policy
decision with respect to incentive, more particularly when it is well within
the right of DGFT/appropriate authority/Union to come out with a new
Exim Policy. Under the circumstances, the submission on behalf of the
appellant that as the appellant placed the order with NKK Corporation,
Japan on 7.2.1990 when the Exim Policy 1988-91 was in force and
therefore the appellant shall be entitled to the benefit of additional
licence by applying the doctrine of promissory estoppel cannot be
accepted. The policy and the incentive scheme are very clear. Incentive
in the form of an additional licence is on actual export in the previous
year. Therefore, the relevant date shall be the date on which the export
is made. Under the circumstances, the decisions relied upon on behalf
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of the appellants on the principle of promissory estoppel shall not be of
any assistance to the appellant and shall not be applicable at all on the
facts of the case on hand.
8. Now so far as the submission on behalf of the appellant that in
case of some other similarly situated exporters, the benefit of additional
licence has been granted and therefore the appellant is entitled to the
benefit of additional licence on the export made between April, 1990 to
March, 1991 is concerned, merely because some others are granted the
benefit wrongly, the appellant cannot be permitted to pray for the similar
benefits. There cannot be any negative discrimination which may
perpetuate the illegality. The appellant cannot be allowed the benefit of
additional licence on the ground that some others might have been
granted such benefits de hors the scheme, which otherwise the
appellant is not entitled to under the scheme. At this stage, it is required
to be noted that in fact in the impugned judgment and order, the High
Court has directed to hold an enquiry how the others were granted the
benefit. However, unfortunately no further enquiry is held. It is very
unfortunate that despite the High Court’s order, no further enquiry has
been conducted. Be that as it may, once it is held that the appellant is
not entitled to the benefit of additional licence on export of “Minerals and
Iron Ore”, the matter ends there and the appellant cannot be allowed
such benefit, which otherwise the appellant is held not entitled to.
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9. In view of the above and for the reasons stated above, the High
Court has rightly confirmed the order passed by the authority denying
the benefit of additional licence to the appellant. We are in complete
agreement with the view taken by the High Court. The appeal deserves
to be dismissed and is accordingly dismissed. No order as to costs.
……………………………….J.
[M.R. SHAH]
NEW DELHI; ………………………………J.
NOVEMBER 04, 2022. [KRISHNA MURARI]
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